Embracing equality & inclusivity

The G20 Summit 2023 began in New Delhi on September 9, 2023, at Pragati Maidan—now known as the Bharat Mandapam International Exhibition-Convention Centre (IECC). In addition to the heads/representatives of the G20 member states, Bangladesh also has been invited, among others, to participate as a guest country. Significantly, Bangladesh is the only invitee which shares a common border with India.

The G-20 includes all members of the Group of Seven (G-7), a forum of the European Union and the seven of the world’s largest developed economies: France, Germany, Italy, Japan, the United States, the United Kingdom, and Canada. In addition to these 8, the other 12 members of the G20 are: Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, and Turkey. G20 represents about 80 per cent of the global GDP, 75 per cent of international trade, and two-thirds of the world’s population.

G20 also has many common members with the 38-member Organisation for Economic Co-operation and Development (OECD)—an international organisation that works to build better policies for ‘better lives’. OECD provides a unique forum and knowledge hub for data and analysis, exchange of experiences, best-practice sharing, and advice on public policies and international standard-setting. The majority of OECD members are high-income economies with a very high Human Development Index (HDI) and are regarded as developed countries.

Inaccurate image of India

The image of India that Prime Minister Narendra Modi wants to project at the G20 is one of a modern superpower, a leader of the Global South, and a voice for impoverished nations. However, as per the latest UNDP’s Human Development Report (HDR), India — the most populous country of the world — has the lowest HDI among the G20 members and ranks 132 among 191 nations. CNN reports that though India advocates for the global poor, it cleared several slums with bulldozers as G20 drew near. Roadside stalls and shops have been demolished, lest they tarnish Prime Minister Narendra Modi’s carefully crafted image of a rising India.

Although Chinese President Xi has skipped the summit, China did not miss the opportunity to advise India on the G20 presidency. China said, “India should use the G20 presidency to demonstrate its determination to reform its economy, expand its openness, attract foreign investment, and provide a fair business environment for foreign investors — and also gradually implement these measures.”

Remarking on Modi government’s exhilaration on the G20 Presidency, noted economist Ashoka Mody, in his recent article ‘India’s Fake Growth Story’, alleges that Indian authorities are downplaying inconvenient macroeconomic facts so that they can celebrate seemingly flattering headline figures ahead of hosting the summit. Citing the example of GDP growth figures, he says that with an annual growth of 7.8 per cent in the second quarter of this year, India appears to be the world’s fastest-growing major economy. Actually, the growth is low, inequalities are rising, and job scarcity remains acute. Highlighting the massive discrepancy between production and expenditure figures, he mentions Indian National Statistical Office’s latest report which shows, while income from production increased at an annual 7.8 per cent rate in April-June, expenditure rose by only 1.4 per cent. According to him, the proper approach is to recognise both income and expenditure as imperfect macroeconomic aggregates, and then combine them to assess the state of the economy. The Australian, German, and UK governments adjust their reported GDP using information from both the income and expenditure sides.

Human-centric globalisation

The G20 events under India’s Presidency began in 2022, and till now, more than 200 events have been organised across 50 cities. This year’s G20 Presidency theme is “Vasudhaiva Kutumbakam”. According to a press release, dated September 7, 2023, by the Prime Minister’s Office; these two words capture a deep philosophy. The phrase means ‘the world is one family’. This is an all-embracing outlook that encourages mankind to progress as one universal family, transcending borders, languages, and ideologies. During India’s G20 Presidency, this has translated into a call for human-centric progress. The press release of the PM’s office also claims that the post-pandemic world order is very different from the world before it. Among others, there are three important changes,

* First, there is a growing realisation that a shift away from a GDP-centric view of the world to a human-centric view is needed;

* Second, the world is recognising the importance of resilience and reliability in global supply chains;

* Third, there is a collective call for boosting multilateralism through the reform of global institutions.

India’s G20 Presidency has played the role of a catalyst in these shifts, PMO claims.

Reacting to a question on the biggest challenge facing the G-20 as India hands over the Presidency to Brazil, the Indian Prime Minister Narendra Modi has said, “a GDP-centric view of the world is now changing to a human-centric one. Like a new world order was seen after World War II, a new world order is taking shape post-COVID. The parameters of influence and impact are changing and these need to be recognised. India played the role of catalyst”, adding that “Sabka Saath Sabka Vikas’ model that has shown the way in India can also be a guiding principle for the welfare of the world.”

In another interview, Modi has hailed the country’s technological expertise, explaining how “India’s tech revolution has not only had an economic impact but also a deep social impact.” He highlighted the effects of several tech projects and schemes, including Open Network for Digital Commerce (ONDC) and Jan Dhan-Aadhaar-Mobile (JAM). He also claimed that India’s tech revolution has not only had an economic impact but also a deep social impact. When it comes to the application of technology, India prefers a “human-centric model”, said PM Modi, which helps empower individuals, bridge gaps, and extend the benefits of growth and welfare to even the farthest reaches, reports ABP News.

Alternatives to GDP-centric views are not new; Bhutan attempts to measure Gross National Happiness, which considers factors like equitable socio-economic development and good governance. UNDP’s Human Development Index (HDI) is another such initiative to develop a different approach. HDI captures health and knowledge, apart from economic prosperity.

India is also beginning to focus on the ease of living of its citizens. The Ministry of Housing and Urban Affairs has developed the Ease of Living Index to measure the quality of life of its citizens across Indian cities, as well as economic ability and sustainability.

Rationale for human-centric growth model

In May 2017, the World Economic Forum published a policy brief titled, ‘A Leadership Agenda for G20 Governments — Advancing Human-Centred Economic Progress in the Fourth Industrial Revolution’, wherein the WEF had set the agenda for G20 leaders. Under India’s Presidency, this policy to reorient the growth models of G20 economies is being formalised. The policy paper outlined a narrative vision and policy agenda aimed at ensuring that the technological progress of the 21st century (the fourth revolution phase) augments, rather than substitutes for, human potential and employment.

A brief description of the four phases of industrial revolution will help to understand the rationale of the human-centric development model.

* The First Industrial Revolution (1750-1870) saw the widespread use of steam, the introduction of the factory system, the development of the railroad and huge advances in metallurgy and chemistry.

* The Second Industrial Revolution (1870-1914), led to the development of electricity networks, the telephone, the automobile, the gas turbine, artificial fertiliser and other technologies that once again changed how people moved, communicated, consumed and saw the world.

* The Third Industrial Revolution took off in earnest in the 1960s and its major components were mature by the early 2000s with the spread of the Internet and mobile telephony.

* The Fourth Industrial Revolution is enabled by the digital technologies of the third, and is represented by breakthroughs in fields as diverse as artificial intelligence and machine learning, advanced robotics and drones, new approaches to energy generation and storage etc.

Way back in 2017, the WEF policy paper cautioned the G20 leaders that public concern about inequality, insecurity and the prospects of younger and future generations was a top preoccupation of political, business and other leaders in many countries. The Fourth Industrial Revolution threatened to exacerbate these trends in the absence of a clear, countervailing strategy. People sensed this instinctively in both advanced and emerging economies as they witnessed robots being installed in factories and artificial intelligence applications beginning to disrupt a succession of large, mainstream job classifications.

To address these challenges, WEF proposed:

* An alternative, human-centred economic growth model in which social inclusion was consciously “designed into” multiple relevant aspects of economic policy in a concerted effort to broaden the base and strengthen the resilience of growth by diffusing more widely among workers, families and communities.

* An explicit strategy to place people and their living standards at the centre of economic policy that would constitute an agenda to engage and shape the future rather than resist or hide from it through short-term placebos (e.g. macroeconomic stimulus or mercantilist trade measures), public misdirection (e.g. scapegoating minorities and immigrants or idealising a bygone era) or mistaking means for ends (e.g. insisting on the benefits of globalisation without making appropriate domestic investments and reforms).

* Governments to move beyond the efficiency-enhancing and short-term-optimising growth model of recent decades to a new one in which they enhance technological progress by working proactively and flexibly with stakeholders to socially de-risk it, and they strengthen growth and inclusion simultaneously by reconceptualising structural reform as a systematic, multidisciplinary strategy to capture the unexploited synergies in an economy between the two.

* G20 governments should work individually and collectively to design social inclusion into: a) the normative context within which advanced technologies develop and diffuse; and b) the central logic of national economic policy and international economic cooperation, especially (but by no means only) with respect to modernising and increasing investment in human capital formation and labour markets.

* Practical action to inspire greater public confidence in the capacity of market economies to create positive synergy between humans and machines in the workplace in the decades to come.

* For the Fourth Industrial Revolution to be “human-centred”, such influence must be transparent, and organisations that employ such means must be held accountable accordingly. For example, a number of emerging technologies will have environmental and health-related externalities that must be assessed and guarded against.

Fear of large-scale social unrest due to the disruptive nature of the fourth industrial revolution has compelled the WEF to suggest a human-centric model. A research report by global management consultancy, Boston Consulting Group (BCG), presented at the World Skills Conference 2019 in Kazan amid rising concerns over how to address the dramatic shift in employment caused by new technologies and business models as well as

rapid and continuing urbanisation, suggested that adopting a more human-centric approach to human capital development could accelerate the GDP growth in a given country by between 0.5 per cent and 2 per cent.

It also pointed out that skills mismatch already impacted over 50 per cent of employers. “By 2030, 1.4 billion workers will not have the right skills for their jobs. A third of all existing professions are expected to change by 2035 with the expansion of IT, AI and robots,” it said.

Rising global inequality

A Brookings’ report (May 2023) titled ‘Rising inequality: A major issue of our time’ says that the contemporary global inequalities are close to the peak levels observed in the early 20th century. Over the past four decades, there has been a broad trend of rising income inequality across countries. Income inequality has risen in most advanced economies and major emerging economies, which together account for about two-thirds of the world’s population and 85 per cent of global GDP. The increase has been particularly large in the United States, among advanced economies, and in China, India, and Russia, among major emerging economies.

The World Inequality Report 2022 says that 1 per cent of the population owns 38 per cent of total wealth and 10 per cent of the population owns 76 per cent of total wealth. Income inequalities are not much better. The richest 10 per cent today snap up 52 per cent of all income. The poorest half get just 8.5 per cent.

Oxfam India’s report on inequality finds that just 5 per cent of Indians own more than 60 per cent of the country’s wealth, while the bottom 50 per cent of the population possess only 3 per cent of the wealth. The report, ‘Survival of the Richest: The India story’, also says that between 2012 and 2021, 40 per cent of the wealth created in India has gone to just 1 per cent of the population and only a mere 3 per cent of the wealth has gone to the bottom 50 per cent, adding that the total number of billionaires in India increased from 102 in 2020 to 166 in 2022. The report further claims that if India’s billionaires are taxed once at 2 per cent on their entire wealth, it would support the requirement of Rs 40,423 crore for the nutrition of malnourished in the country for the next three years.

Obviously, these types of income and wealth disparities are not sustainable for the market economy. Hence, so much of clamour is made around the human-centric development model in the G20 agenda.

Observations

Widening disparities in the distribution of wealth and income across the globe is threatening the existence of liberal market economy. Not addressing this economic inequality before the next recession would be imprudent. Hopefully, G20 will focus first on ensuring that there is ample government revenue to pursue various development programmes, by taxing wealth and not just income. Steep rise in wealth tax shall narrow the gap between the top ten per cent and the bottom fifty per cent.

One of the key issues during the G20 meeting will be the persistent and crippling problem of debt among a number of developing countries. The Indian Express reported that the external debt — the money borrowed from richer countries, multilateral creditors like the World Bank and IMF, or private lenders such as banks — of these nations, mostly in the global south, has gone up by 150 per cent between 2011 and 2023, reaching their highest levels in 25 years. Hopefully, the present G20 summit under India’s Presidentship will address this important issue.

The latest Government of India report (2023) on multidimensional poverty index reveals that nearly 210 million citizens of India were multidimensionally poor and they lived in acute multidimensional deprivation of basic necessities of their living. As reported by Millennium Post, this huge number (210 million) of poor people in India roughly equals the total numbers of citizens of Germany (83.4 million), the UK (67.4 million), and France (65.6 million) put together. A country that ranks 132 (out of 191) in HDI and 107 (out of 121) in Global Hunger Index is the most ideal member of the G20 nations to launch the much-hyped ‘Human-Centric Globalisation’ model for correcting the global wealth and income inequality.

Views expressed are personal